Summary The City of Alachua establishes water, wastewater and reclaimed water rates to generate revenue sufficient to meet its operating expenses. The City of Alachua’s water, wastewater, and reclaimed water rates were last modified in 2014 for the Fiscal Year 2015 budget process. Administration evaluates utility rates annually during the budget process and, if warranted, recommends rates be adjusted.
Staff utilizes models for developing water, wastewater and reclaimed water rates. The forecasts determine whether or not rates will produce revenues which are sufficient to meet the expenses associated with providing utility service to our residents.
Over the past five years, there has been a significant decrease in sales. The decrease is 15% water and 13% wastewater. Staff believes this can be attributed to the economic climate, efforts to heighten customer awareness of the need to conserve water as a resource, and the water conservation rate structure the City adopted in 2010.
Some of the City’s costs for providing utility services have decreased as a result of decreasing sales. However, many of the City’s costs to provide utility service are fixed, or have increases due to staffing, fuel, repair, etc. Debt service increased more than $400,000 annually as a result of bringing the upgraded wastewater treatment facility on line. Staff proposes an increase in its water, wastewater, and reclaimed water rates to ensure the funds operate in a self-sustaining manner.
The Florida Public Service Commission (FPSC) publishes Water and Wastewater Price Index (attached). The prices establish a price increase or decrease for major categories of water and wastewater operating expenses. The intent of the price index is to identify the necessary adjustment that utility service providers should make to their rates to stay abreast of inflationary or deflationary pressures. The FY 2015-16 FPSC approved a water and wastewater price index of 1.57%.
Staff was not able to develop proposed water, wastewater, and reclaimed water rates by applying the FPSC Price Index. The proposed rate increase is 3%, to amend the water, wastewater, and reclaimed rates, which are identified in the attached ordinance. The proposed rates provide for changes to the customer charge and consumption charge as identified below:
Customer charge Existing Proposed
$7.44 $7.66 per month
Residential Service Existing Proposed
Tier 1 (0-4,000 gallons) $1.76 $1.81 per 1,000 gallons
Tier 2 (4,001-8,000 gallons) $2.29 $2.36 per 1,000 gallons
Tier 3 (8,001 gallons and above) $3.44 $3.54 per 1,000 gallons
Non-residential (Commercial, Industrial, and Fire Line) Service
Existing Proposed
Tier 1(all consumption) $2.29 $2.36 per 1,000 gallons
Irrigation (Residential and Nonresidential) Service
Existing Proposed
Tier 1(all consumption) $3.44 $3.54 per 1,000 gallons
Wastewater:
Customer charge Existing Proposed
$9.75 $10.04 per 1,000 gallons
Residential customers Existing Proposed
$5.12 $5.27 per 1,000 gallons
Nonresidential Customers Existing Proposed
(Commercial and Industrial) $7.12 $7.33 per 1,000 gallons
Reclaimed Water:
Customer charge Existing Proposed
$7.32 $7.54 per month
Consumption charge Existing Proposed
$0.67 $0.69 per 1,000 gallons
On July 13, 2015, staff presented the proposed water, wastewater and reclaimed rate increases to the City Commission in a public workshop. The proposed FY 15-16 Waster and Wastewater System Budget reflects the projected revenues associated with the proposed rate increases. |